Crude oil prices rise due to tightening supplies

18 Jul 2023 , 11:54 AM

As investors anticipated a potential tightening of U.S. crude supplies, oil prices crept upward in early trade on Tuesday after falling in the previous session due to weaker-than-expected Chinese economic growth.

Brent crude had risen 11 cents to $78.61 per barrel, while U.S. West Texas Intermediate crude had climbed 15 cents to $74.30.

On Monday, both contracts decreased by more than 1.5%.

Investors awaited business data later on Tuesday, which was predicted to indicate that goods inventories and crude oil stocks in the US likely decreased last week.

According to data released on Monday by the Energy Information Administration, U.S. shale oil output is forecast to slip to close to 9.40 million barrels per day (bpd) in August, which would be the first monthly decrease since December 2022.

Nevertheless, the restart of production at two of the three Libyan sources that were shut down last week may increase world supply. A demonstration protesting the kidnapping of a former finance minister has interrupted production.

Prices are being restrained by worries about the Chinese economy. In the second quarter, the nation’s gross domestic product (GDP) expanded 6.3% year over year compared to analyst expectations of 7.3% as the post-pandemic recovery slowed down.

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